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Newsletter October 2010

FDI GREECE

China: Major Investment Partnership

Greece and China Enter a New, Dynamic Investment Relationship

The Premier of China began a visit to Europe in Athens, where he met with Greek Prime Minister George Papandreou and members of the Greek government, and at which time Greece and China entered into a new, dynamic investment relationship.

Thirteen bilateral agreements, a pledge that Beijing will continue purchasing Greek treasury bonds and a tour of the port of Piraeus, the site of a major investment by Chinese multinational Cosco, were the highlights of the first day of the visit to Athens by the Chinese Premier, a visit that is viewed as a high-profile "vote of confidence" for the Greek economy.

Of the 13 agreements, 11 are commercial.

"With foreign currency reserves China has already purchased Greek bonds, and will participate in the purchase of new bonds issued by Greece," Mr. Wen Jiabao said, while forecasting that bilateral trade between the two countries will reach eight billion dollars annually within the next five years.

In a bid to reach out to one of the Greek economy's "mainstays" -- ocean-going maritime transport -- the influential Chinese leader announced the establishment of a Sino-Greek development fund of five billion US dollars to provide financing to Greek shipowners choosing to build new vessels in China.

In terms of the all-important investments fronts, in light of Greece's emphasis on attracting FDI, Wen Jiabao said the Chinese side will significantly increase its investment at the port of Piraeus, Greece's largest, while also examining the possibilities of investment in other sectors and areas.

"We are pleased with this vote of confidence for the efforts being made by the Greek people and government to put our country back in order," Prime Minister Papandreou said, noting that "this is vote of confidence to continue buying Greek bonds -- a vote of confidence also for the EU; it's a vote of confidence that investments will increase in Piraeus, allowing it to become a China-Europe transport hub; a vote of confidence that you want to double Greek imports to China, and many other decisions, such as the Greece-China development fund for ship-building in China and a call to your entrepreneurs to invest in Greece."

"The Greek government has taken timely and effective measures to deal with the crisis, and structural reforms to rehabilitate the fiscal system. We also noted the joint support mechanism by the IMF and EU, as well as (the fact) that these measures have produced positive results ... I am confident that the Greek economy will also recover along with the international economic recovery. Greece, during its history, has acquired invaluable spiritual wealth, and I believe that with its own effort it will overcome this difficulty," Premier Wen Jiabao said.

Chinese direct investments in Greece and equivalent Greek investments in China are foreseen in a memorandum to boost bilateral cooperation in investments signed by Greek Regional Development and Competitiveness Minister Mihalis Chrysohoidis and his Chinese counterpart Chen De Ning.

The MOU is part of a bilateral agreement for economic, industrial and technological cooperation that aims to support existing investments and also encourage new investments by both sides that introduce new areas of economic activity.

Addressing the Greek Parliament on October 3, Premier Wen Jiabao gave China's "vote of confidence" in Greece's future, saying that through closer cooperation China could help Greece quickly overcome its present difficulties.

The two sides will increase the mutual exchange of information concerning investment legislation, policy and investment opportunities in order to further assist investors from both countries. Greek companies will be encouraged to enter into partnerships with Chinese companies in China and vice-versa.

Tools used to achieve these aims will include seminars, visits to outline investment opportunities, meetings and exhibitions for investors and for trade, use of the Internet and other communications media. During the five-year period of the memorandum, the two sides will hold regular meetings to review and promote activity encouraging investment activity in both countries.

During an address to the Greek Parliament, Premier Wen said the effort to deepen and develop Greek-Chinese cooperation should focus on boosting bilateral trade, shipping and transport, science and tourism.

He called for a doubling in the volume of bilateral trade transactions, adding that China was ready to double its imports of Greek products such as olive oil and wine.

Noting that the Chinese government was encouraging Chinese businesses to establish logistics services in Greece and encouraging Greek ship owners to boost transactions with China, he said the two sides should cooperate in the management of the container terminal in Piraeus, aiming to increase its turnover by 3.7 million containers a year by 2017.

The Chinese premier repeated plans for a research centre that will investigate ways to save energy and promote investment in renewable energy sources and outlined plans for further cooperation in tourism through measures to facilitate the flow of tourists to and from Greece.The Premier’s speech particularly emphasised relations between the EU and China, saying that these were now entering a new phase of "mature and healthy development". He pointed out that China was now one of the chief suppliers of technology to Europe and also one of Europe's main trading partners.

Describing the EU and China as "complementary", the Chinese premier pointed to figures showing that EU exports to China had increased 42 percent in the first half of 2010 and were expected to reach 500 billion dollars by the end of the year.

He underlined that his country was steadfastly pursuing a "win-win" strategy in its dealings with the rest of the world, both on the level of cooperation in technology, in trade and development, and in dealing with global challenges.